Two Karuturi directors file suit against receivers over property

Two directors of the bankrupt Karuturi flower farm have moved to court accusing the company’s creditors and receiver managers of destruction of property. 

Anitha Karuturi and Sai Ramakrishna Karuturi told the court that Stanbic Bank and ICICI Bank colluded with the three receiver managers to demolish a property the two had been using as a wildlife and bird-watching lodge.

The Masdam House, they said, was patronised by high-value visitors.

Following the demolition, the two claim to have lost invaluable items including, Persian carpets, jewelry, home ornaments and crockery valued at Sh34.2 million.

However, the court asked each of the applicants to first deposit a security of Sh10 million before the case continues.

Such security, the court said, may be in the form of a cash deposit in court or a joint account in the names of the respective advocates, or in the form of a bank guarantee from a reputable bank agreed upon by the parties.

“In default of compliance with the provisions of such security, the plaintiffs’ claim shall be struck out with costs to the defendants,” said High Court judge David Majanja in an October 23 judgment.

The order followed arguments by the five defendants in the case that due to the fact that the two were residents of India, they needed assurance that the applicants would pay the cost should they lose the case.

The defendants include the two creditors, Stanbic Bank and ICICI Bank, and receiver managers Ian Small, Kieran Day and KVS Kamasastry.

They denied demolishing the house, saying it was done on the orders of the Water Resources Management Authority.

Masdam House, they argued, was not owned by the plaintiffs but was part of the securities offered by the defaulting companies.